Presentation on theme: "Mega Food Parks Scheme & Features"— Presentation transcript:
1 Mega Food Parks Scheme & Features Pre-Bid Meeting for Expression of Interest
2 Mega Food Parks SchemeScheme formulated to accelerate growth of food processing industry in the countryCluster Based ApproachDemand driven with focus on strong backward and forward integrationEnabling Infrastructure Creation along the supply chainCreation of Central Processing Centre and Primary Processing CentresCommon Facilities and amenities to be assistedLeverage investments in food processing unitsStakeholder participation with private led initiative through Special Purpose Vehicle (SPV)
3 Mega Food Parks Scheme Contd... Assistance to creation of common enabling facilitiesTypical Project Cost envisaged – Rs croreLand – not eligible for funding out of GOI grantAssistance from MinistryLimited to non-land component of the project50% of project cost limited to Rs 50 crore in general areas75% of project cost limited to Rs 50 crore in difficult & hilly areas and ITDP notified areas
4 Mega Food ParksHolistic & cluster based approach- centralized facilities for key activities which are technology and capital intensiveSpecific focus on setting up backward linkages for establishing viable supply chains - Provision for farm proximate aggregation & minimal processing infrastructureInfrastructure needs of a viable Food park /Zone estimated to be about Rs.1200 million(US $ 30 million) including farm proximate primary processing facilitiesEmphasis on economic viability
5 PPC – Primary Processing Centre Mega Food Park ModelPPCs would be fed by 5-10 collection centresPPCs on 2-5 acres of landFood park ( acres) fed by PPCsCPCPPCFood ParkPPC – Primary Processing CentreCCExtended StorageProcessingTo Value addGradingSorting
6 Mega Food Park Model Contd… FieldCollection CentersPrimary ProcessingCentersPrecooling, Gradingpulping Sorting, waxing,packing ,Temporary storage,Central ProcessingCenterPulping, Aseptic packing,CA chamber, Cold StoreQC lab, Logistics center,Processing UnitsetcMegaFood Park- CPCImporterExporterValue added ProductDomestic salesFresh ProductsPPCDomesticRetail salesFarmer GroupsSelf Help GroupsIndividual farmers
7 Envisaged Project Components in MFP Central Processing Centre : To consist of Developed plots for food processing units, Built factory sheds for MSEs and Core processing facilities along with basic infrastructureCore Processing FacilitiesAt CPC : Sorting and grading, Packaging unit, Dry warehouses, Specialized storage facilities including CA Chambers, Variable humidity stores, Pre-cooling chambers, Ripening chambers etc, Cold chain infrastructure, Irradiation facilities, Steam generation & sterilization units, Food incubation-cum-development centers etc.At least 50% of the project cost (excluding land cost) shall be towards creation of above mentioned facilitiesAbove is an indicative list of facilities and SPV may select or induct any facilities based on need & viabilityAdequate Consultation with the potential food processing units to finalize the components of CPC.
8 Envisaged Project Components in MFP Primary Processing Centres(PPCs): To serve as spoke for CPCCore Processing FacilitiesAt Primary Processing Centers: Sorting and grading, packaging facilities , dry warehouses, specialized cold stores including pre-cooling chambers, ripening chambers , reefer vans, mobile pre-coolers and collection vansPPCs are envisaged as key components to facilitate strong linkages for sustainable supply for adequate raw materials to ensure at least 250 days of operationPPCs are to be strategically located for an optimum coverage in zone of influence of Mega Food Park.
9 Envisaged Project Components in MFP Factory BuildingsProvision For MSEs – Maximum 10% of total allottable area for setting up unitsEnabling Basic InfrastructureRoads, drainage, water supply, electricity supply ETP, logistics facilities, weighbridges etcNon –core InfrastructureAdmin buildings, training centers, canteen, workers hostel, trade/display center etc: Cost of non-core infrastructure facilities, not exceeding 10% of the project cost, would be eligible for grant purposeProject Implementation ExpenseCost of hiring domain consultants (PMC) by SPV – limited to 2% of eligible grant amount
10 Supply Chain Management – Strategy Appropriate institutional development at grass roots level for backward linkagesInvolvement of farmers/producers as stakeholdersOrganizing farmers in SHGs-Cluster approachPossibility of formation of Producers’ Company involving SHGs/ farmers can be an optionWherever possible, Centers to be owned and managed by SHGs/EntrepreneursPossibilities of contract farming
11 Special Purpose Vehicle SPV can be constituted by stakeholders like infrastructure developers, FIs/Banks/PE Firms, Org. retailers, Food Processors & other service providers, Farmer Orgs. etc…SPV to be a Body Corporate registered under the Companies ActSPV should have wide dispersal of equity holding so that it enjoys benefit of collective compositionEach SPV to haveat least three entrepreneurs / business units independent of each other with no common directorsat least one should be from the food processing sector with at least 26% equity in the SPV
12 Special Purpose Vehicle Contd… SPVs to bring in at least 20% of the project cost, including the cost of land, as their contribution- 10% in case of Difficult, hilly & ITDP notified areasCombined net worth of the shareholders of the SPV should not be less than Rs. 50 Cr - Food Processor should have at least 10 Cr of net worthGovernment agencies may also become shareholders in SPV, holding to be less than 26% of share capital so as to ensure private sector character of the SPV
13 Special Purpose Vehicle Contd… Reconstitution of SPV allowed but at least 75% of the initially approved shareholders to remain intact during implementation period of project.Following points are to considered while constituting the SPVPromoter with negative net worth in SPV is not allowedPromoter being a defaulter in RBI list is not allowedProposed equity should be in proportion to net worth of individual promoter
14 Role of Special Purpose Vehicle Formulation of Detailed Project Report (DPR)Procure land & ensure external infrastructure linkages for the projects Obtain key statutory approvals/clearances including environmental clearances etc. Achieve financial closure of project Responsible for development, ownership & management of Mega Food ParkOperating a Trust and Retention Account (TRA) to ensure utilization of grant in a transparent and judicious manner and maintain proper accountExecute project in a transparent, efficient & timely manner
15 LAND ISSUESAt the time of Final Approval, the SPV must be in possession of requisite Land.If the land is in possession with one of the promoters, then SPV should have clear title of land and it should be duly registeredApproval for change in land use for industrial/infrastructural purposes to be takenProvision of “ sub-lease” clause to be stated clearly in case of Government land.The area for CPC should have good accessibility to Market and Transport network
16 CLUSTER MAPPING RELATED ISSUES Details of the focus crops & raw material assessment to be providedViability of Mega Food Park cluster to be established and it should support at least 200 days of operationInherent risks in the continuous supply of raw materials to be identified and their mitigations to be identified.
17 Role of Program Management Agency Assist the Ministry in disseminating information about MFP Scheme & sensitizing the potential stakeholders about the MFPSAssist the Ministry in selection of ProjectsInviting Expression of Interest for projects under the SchemeEvaluation/appraisal of techno-feasibility reports and DPRsAppraisal of the DPRsAssist in the evaluation of any amendments to the projects/DPRsAssist the SPVs in financial closureMonitor & report the progress of the Mega Food Park projects to the Ministry- Web-based MIS & Monitoring
18 Role of Project Management Consultant PMC to be appointed by the SPVPMC to be selected from MFPI list of empanelled agenciesAny other consultants meeting the eligibility criteria as laid out by MFPIPMC to assist SPV inPreparation of DPRImplementation of project including day-to-day supervisionPreparation of BOQs and Bid Process Management in procurement of contractors/materialsAssist SPV in release of GoI grant, duly ensuring requisite documentation for release
19 Operational Process of Selection of Project/SPV Submission of EoIAppraisal of EoIIn-Principle ApprovalSubmission of DPRAppraisal of DPRFinal Approval of DPRRelease of GoI grant – In four phases
20 Evaluation of EoI Appraisal by Programme Management Agency (PMA) To be Scrutinized by Technical Committee (TC)In-Principle Approval by Inter-Ministerial Approval Committee (AC)
21 Scoring Criteria 25 10 Sl. No. Criteria Max. Points Viability of cluster25Adequate volume of raw materials (should support at least 200 days of operation in a year)A wider mix/variety of raw materials (at least 5 crops)Agreements/arrangements for raw materials2Proposed Investment in Core Processing Facilities10Upto Rs 50 croresRs croreMore than Rs 100 crore
22 Scoring Criteria Possession of appropriate land 10 5 Sl. No.CriteriaMax. Points3Possession of appropriate land10Complete possession including title to the land recorded in revenue recordsAllotment letter from State AgenciesAgreement to SaleLand identified, but not acquired4Number of Stakeholders in the Proposed SPV53-5More than 5Extent of involvement of food processing industry and farmer bodiesShareholding Pattern of Stakeholders in the Proposed SPVFood Processor(s) having more than 26% equityNone of the promoter having more than 49% of equity holding
23 Scoring Criteria Sl. No. Criteria Max. Points 6 Net worth of Promoters of the SPV25Rs croreRs.75 – 100 croreMore than Rs.100 crore7Employment Generation10Direct -More than 10,000Between 5,000-10,000Less than 5000IndirectMore than 20,000Between 10,000-20,000Less than 10,000
24 Scoring Criteria Sl. No. Criteria Max. Points 8Leveraging of Investment in food processing units in the CPC10Up to Rs.100 croreRs croreMore than Rs.200 croreAgreements/arrangements with proposed processing units
25 Detail Project ReportDPR to be submitted expeditiously – Latest by six months of In-Principle ApprovalDPR to containDetailed cluster mapping, raw material assessment, product mix etcBusiness PlanTechnical- Master plan, section design & drawings with quotationsFinancial- Detail project cost, P&L StatementManagement Aspects of the Project
26 Project Cost & Revenue Model Related Issues Block cost should be provided for most of the components of infrastructureCap against costs & area allocation for core processing and basic enabling infrastructure as per scheme guidelines are to be followedDeveloped plots in CPC can only be leased to food processing units and sale of the same is not allowedUser charges for various common facilities should be arrived at based on factoring in the GoI grant and existing industry norms
27 DPR Approval Process Approval Process Pre-requisites for DPR Approval Appraisal of DPR by PMAScrutiny by Technical Committee (TC)Final Approval by Inter-Ministerial Approval Committee (AC)Pre-requisites for DPR ApprovalIncorporation and registration of SPVExecution of share subscription agreementPossession of requisite land by SPVMeans of FinanceIn-principle sanction Letter from Bank
28 Release of Grant To be released in 4 installment 1st installment of 30% of grant amount in two phases1st phase – 10% as advance within 15 days of Final ApprovalIncorporation of SPV. Possession of land with SPV as per DPR requirements, and its conversion into industrial use, if needed.Execution of share subscription agreement Establishment of Trust and Retention Account in a Schedule ’A’ Commercial Bank and signing of TRA agreement Appointment of a nominee from the Ministry on Board of the SPV- Tenure of the Ministry nominee will be co-terminus to operationalization of the project. Final approval of the project by AC.Proof of equity contribution of at least 10% by SPVProof of appointment of PMCRecommendation of PMA confirming the above points
29 Release of Grant…. 2nd phase – 20% of grant amount Submission of Utilization Certificate for the grant released in the 1st phase of First installment Details of the contribution of the SPV towards its share of the project cost. Sanction Letter for loan Component, in case SPV is taking term loans. Award of contracts worth at least equivalent to 30% of the total project cost, excluding the land cost.The release to be made within 30 days of the SPV requesting the same, upon completion of aforesaid conditions
30 Release of Grant…. 2nd installment of 30% of grant amount after the utilization of the 2nd phase of the first installment- Submission of Utilization Certificate (UC) of the 1st Installment.after further proportionate expenditure (equal to the GOI share released) has been incurred by the SPV on the project excluding cost of land.The release shall be made within 30 days of the SPV requesting the same, upon completion of aforesaid conditions.
31 Release of Grant…. 3rd installment of 30% of grant amount after the utilization of the 2nd installment - Submission of Utilization Certificate (UC) of the 2nd Installmentafter further proportionate expenditure (equal to the GOI share released) has been incurred by the SPV on the project excluding cost of land.The release shall be made within 30 days of the SPV requesting the same, upon completion of aforesaid conditions.
32 Release of Grant 4th installment of 10% of grant amount on Successful completion and operationalization of the projectAt least 30% capacity utilization of common facilitiesSubmission of Utilization Certificate for 3rd installmentSeparate accounts to be kept for GoI fundsRefund with accrued interest as per GoI norms in event of SPV withdrawing from the project